KARACHI: Government’s adverse policies and frequent price increase by local assemblers kept the sale of vehicles in the red zone, dealers said on Thursday.
Locally assembled and imported vehicles’ sale collectively declined by 13 percent in fiscal year 2013-14 (FY14) to 160,372 units as compared to 184,902 units in FY 13.
Auto makers remained failing to fulfil market’s demand in FY14 as well as demand-supply gap was rapidly reducing the local auto market’s trade every year, which could be ascertained as in FY12 total auto sales included locally assembled and imported vehicles stood at 213,028 units while in said year it narrowed to 160,372 units.
According to the indicators provided by All Pakistan Motor Dealers Association (APMDA) the influx of total imported passenger cars including 4x4 jeeps in last fiscal have fallen by 52 percent to 22,220 units as compared to the total 45,378 units in FY 13.
Largely requirement of the local auto market was being met by imported used cars, but due to age restriction limit the import of used cars shrunk by 52 percent, which led to lower the market supply, but demand was still there.
Sales figures of locally assembled vehicles stood at the same for last fiscal while only imported vehicles contracted in FY14, which showed age limit restriction on imported vehicles could not bear fruit for local auto assemblers.
Some industry experts attributed poor economic and security conditions to poor performance of the local auto industry as public’s purchasing power has severely shrunk in the last few years.
As far as customers’ tendency is concerned poor economic conditions claim is happened to be false as above 1000 cc luxury cars remained first choice of Pakistanis during the said period.
It can be judged despite ongoing protracted energy crisis, Pakistani auto market still dominating with high fuel consumption luxury cars as 52 percent vehicles amongst total sold cars (local and imported) in FY 14 were above 1000 cc.
However, some market players believed local auto makers are deliberately creating demand of luxury cars by stopping production of below 1000 cc cars’ segment as luxury vehicles are more profitable for auto assemblers.
Experts pointed out the share of below 1000 cc cars in parallel market (imported vehicles) stood at 16,193 units amongst total 22,220 units of imported cars in FY14 by local dealers.
They said these figures clearly projected the huge demand of small cars’ segment in local market, but the government’s restriction to import only three years old age vehicles proved anti consumer verdict.
The import of 23,484 used passenger cars including 4x4 jeeps, buses trucks, motorcycles and other vehicles during the whole fiscal 2013-14 has contributed around Rs 9.5 billion to the national exchequer in terms of duties and taxes on the import of Rs 13.26 billion worth of vehicles, APMDA’s data claimed. The same figure stood at 19.93 billion in FY13.
Meanwhile 23,484 units of imported used vehicles and 136,888 units of local assembled cars, making a total 160,372 were sold in FY14 as against 49,395 units of imported cars and 135,507 units of locally-assembled cars, making a total of 184,902 units in FY 13, fell 24 percent on yearly basis.
KARACHI: Karachi equity market ended higher amid lackluster trading activity on Thursday. Investors ...